Taxing times likely for farmers as tractor tax may be hiked manifold

Once this amendment comes into effect, agricultural tractors can be registered only in the non-agricultural (commercial) category.CHENNAI: Farmers may soon have to shell out up to Rs 640 per year in taxes to register their tractors, which are presently exempted, if a recent proposal by the Union road transport ministry to reclassify them as commercial vehicles comes into effect.

At present, agricultural tractors are exempted from road tax and only pay Rs 50 as registration fee.

Once they are brought under the ‘transport’ category, tractor owners would be paying road taxes on par with commercial taxes.

Besides this, there would be a steep hike in the amount paid as third party insurance premiums and fitness certificate charges annually, say farmer welfare associations.

On an average, nearly two lakh tractors are registered in regional transport offices (RTOs) across Tamil Nadu. “Of this, nearly 99% are registered as agricultural tractors and thereby avail tax exemptions. Only very few register their vehicles for non-agricultural purposes. However, in reality many use tractors for commercial purposes like transport of sand, gravel and people,” said K Manigandan, secretary of the Tamil Nadu Automobile Association.

This led to a significant revenue loss for the government. To address this, the Union road transport ministry on September 27 proposed to remove the phrase ‘Agricultural tractor is a non-transport vehicle’ from sub-rule (b) of rule 2 in the Central Motor Vehicle Rules, 1989.

Once this amendment comes into effect, agricultural tractors can be registered only in the non-agricultural (commercial) category.

“We are already paying 18% GST for most agriculture-related products besides high taxes on fuel. So this additional tax would leave farmers more distressed,” said ‘Cauvery’ Dhanapalan, general secretary of a farmers’ welfare society in the Cauvery delta area. S Rajavel, a leading automobile dealer in the state, said the sale of tractors has already witnessed a marginal drop this season and he was optimistic that it would increase after the monsoon season, “If the expenses are going to shoot up, the sale would continue to remain dull,” he said.